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Slight increase in replacement hiring despite continuing uncertainty

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SLIGHT INCREASE IN REPLACEMENT HIRING DESPITE CONTINUING UNCERTAINTY

During June 08, the number of new job vacancies within London’s financial services industry rose nine per cent compared with the previous month (May 08). The rise in job volumes can be attributed to a longer working month in June compared to May 08 as well as firms paying closer attention to reducing the gap between staff turnover and replacement hiring. Nevertheless, job volumes remained down on the same month the previous year (June 07), registering a drop of seven per cent.  

The level of uncertainty surrounding job security continued amongst individuals working within the City, prompting a rise in the number of candidates looking for a new role. Likewise, for many individuals, the summer season is viewed as a good time to move roles as they can utilise their ‘gardening leave’ over the summer months before starting their new job in the autumn. During June 08, the number of new candidates looking to move roles increased six per cent compared with May 08 and 17% versus the same month the previous year (June 07). 

Employers within London’s financial services industry continue to remain cautious throughout all stages of the recruitment process and are therefore taking longer to confirm job offers. Individuals who did secure a role during June 08 took an average of 58.8 days to do so, 16 days longer than their counterparts did a year ago (June 07). 

Robert Thesiger, CEO of Morgan McKinley’s parent company, Imprint commented: “The slower pace of recruitment adopted by a number of firms over the past six months combined with higher levels of staff turnover has led to a slight increase in the amount of replacement hiring organisations undertook last month. This move was aimed at more closely balancing staff turnover rates with replacement recruitment volumes. However, due to the continued uncertainty in the global financial services markets, it is unlikely that this marginal increase in job activity will be sustained over the summer months.   

“With the majority of firms continuing to focus on reactive hiring, the growth in the availability of talent has meant that employers can afford to take their time to source the right talent. Given the challenging market environment that we’re in, it is now more important than ever that employers hire the right people who can clearly add value to an organisation.”

The average City salary registered £50,645 during June 08, an increase of five per cent on the previous month (May 08). Despite this, there was a drop of 1% compared with June 07. Candidates who moved roles during the second quarter of 2008 received an average basic salary increase of 19% compared to an average of 21.7% during the second quarter of 2007. 

Thesiger concluded: “Although the number of new candidates has outweighed new job vacancy volumes for the seventh consecutive month this year, the gap between the two has reduced to its smallest level so far during this period. Wage inflation has then occurred due to simple supply and demand economics.

“It is encouraging to see that candidates are still receiving a healthy increase in their average basic salary when moving roles, highlighting continued demand from employers for the best talent. However, there’s still a high level of cautiousness within the market and therefore basic salaries are likely to continue to be somewhat volatile over the coming months.”  

 

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